Chart Industries Inc. has reported record orders, sales and backlog in its 2019 fourth-quarter (Q4) results.
The US-based cryogenic equipment manufacturer posted Q4 orders of $343.5m, a 20% increase over Q3 2019, which contributed to record full year orders of $1,412.9m, a 23.7% increase over full year 2018. The increase was driven by record orders in trailers, LNG fuelling stations, cryogenic equipment in India, lasers, hydrogen, cannabis and water treatment.
Energy & Chemicals Cryogenics orders of $54.4m was a 55% increase over Q3 2019, with no significant Big LNG orders received in either quarter.
Chart has a record backlog ($762.3m), up 34.2% from Q4 2018 and driven by strong Q4 2019 orders, and the company saw a full year record sales of $1,299.1m, including the highest order quarter in history for Distribution & Storage Western Hemisphere (“D&S West”).
“Significant demand in the fourth quarter of 2019 for our cryogenic equipment in both global infrastructure applications as well as specialty markets contributed to 2019 record orders, sales and backlog for Chart,” said Jill Evanko, Chart’s President and CEO.
“With the expectation of continued broad-based order strength throughout 2020 as well as additional Big LNG orders, we expect 2020 to be another record year.”
Chart reported full year record sales of $1,299.1m, a 19.8% increase over 2018 supported by record organic sales.
“Our high demand is driven by two key areas in the business: global clean energy infrastructure buildout and specialty markets,” Chart said in a statement.
“As we support countries and customers in their efforts to move toward carbon neutral environments, demand for our LNG fueling stations, trailers, small-scale offerings and other infrastructure related products continues to increase. LNG fuelling stations set record order levels in 2019, with 55 stations compared to 30 in 2018. Additionally, 2019 is our second consecutive year of record orders for trailers, with a 9.4% increase over 2018. In the fourth quarter, we received a $9m order for a small-scale terminal in the Caribbean, and in January 2020 announced the receipt of the letter of intent for IPSMR® and cryogenic equipment for Eagle LNG’s Jacksonville small-scale LNG terminal for which we expect the order and full notice to proceed in 2020.”
Chart has completed its first year of ownership of VRV and will no longer include VRV related integration costs in its adjustments going forward. The business in 2020 will reflect the integration efforts of 2019, including the insourcing of its inner and outer vessels, 12 new customers from the combination of the businesses ($16m of order synergies with record India orders).
With higher margin backlog as of December 31, 2019 from shipping pre-acquisition low and negative margin orders and standardising on tank designs, Chart expects VRV to be at the originally assumed run-rate operating margin of 12% in 2020.
In 2019, Chart achieved $20m of its targeted $29m of cost synergies from the Air-X-Changers integration, with the biggest impact from the completion of the consolidation of three Tulsa, Oklahoma facilities into one. The remaining $9 million is expected to be completed by June 30, 2020.
Chart’s 2020 revenue outlook, which includes one Big LNG project’s revenue (Venture Global Calcasieu Pass), is $1.645bn to $1.71bn, compared to the prior total revenue outlook of $1.615 to $1.68bn. The increase is driven from the timing shifts of fourth quarter 2019 orders and revenue. Both guides are and were inclusive of $100m dollars of Calcasieu Pass related revenue.